After Canada’s financial intelligence unit and anti-money laundering watchdog fined the Canadian National Exhibition’s (CNE) casino almost $200,000, the temporary non-profit casino has appealed in Federal Court.
The appeal filed by CNE Casino on Aug. 13 and obtained by Canadian Gaming Business following initial reporting by the National Post notes that the temporary, non-profit gambling facility has been part of the CNE since 1991. Licensed by the Alcohol and Gaming Commission of Ontario (AGCO) like standard casinos, it offers a limited range of blackjack, roulette, mini baccarat, poker and other casino games with maximum bet stakes of $300.
The casino is primarily positioned as another form of entertainment at The Ex. It only operates for between 18 and 50 days per year and has two full-time employees.
As detailed in the CNE Casino filing, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) hit the non-profit casino with a $199,000 penalty for alleged violations of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
FINTRAC claimed the casino failed to conduct either an adequate risk assessment procedure or a bi-annual review of its compliance program. Each of those two alleged violations carries a maximum fine of $100,000.
CNE Casino baffled at FINTRAC reasoning
In its appeal, CNE Casino denied committing any PCMLTFA violation and criticized FINTRAC CEO and Director Sarah Paquet, calling her justification for finding violations “opaque to the point of unintelligibility.”
Per the court record, FINTRAC’s reasoning for the fine over the risk assessment issue was that procedures had not been kept up to date and that some regulatory requirements were missing. The casino responded that it was not given clarity on which procedures or requirements fell short, and claimed it offered a lengthy description and detailed evidence of its risk-assessment policies and procedures back in April.
On the point of the two-year review, CNE Casino stressed that it explained to FINTRAC that its seasonal business model means it conducts annual compliance program effectiveness reviews.
Noting that Pacquet and FINTRAC determined that the near-maximum fines were “necessary to encourage compliance” and that CNE Casino has the means to pay the full $200,000 penalty, the appeal countered that the punishment is “retrospective and punitive” given that the casino had already complied with PCMLTFA and regulations.
As for how this may proceed, a Federal Court official told Canadian Gaming Business that “it is too early to determine if a hearing will occur [or] where and when it would occur.” Typically, they said, it would take six months for the applicants to submit their requisition for a hearing, and several more months for the court to schedule a date.
Industry frustration with FINTRAC mounts
The situation comes at a time when several leaders in Canada’s gambling industry have voiced frustration with the country’s AML laws and FINTRAC’s operations and how they affect gaming, particularly iGaming. Currently, Ontario’s licensed online gaming operators must file transaction reports manually on a per-incident basis via the FINTRAC portal.
“While online wagering surges and technology reshapes the industry, AML regulations remain stuck in a largely outdated model that creates gaps in the regime and creates unnecessary compliance challenges,” wrote veteran AML compliance expert and Global Head of Advisory Services at Kinectify, Derek Ramm, in a blog in June.
“In Canada, recent enforcement actions in the gaming industry appear to have centered on administrative missteps – such as incomplete internal policies or improperly assessed risk factors – without any indication of actual criminal activity,” he added, a sentiment CNE Casino would likely agree with.
In the biggest recent high-profile incident, Ontario iGaming operators couldn’t use FINTRAC to file any suspicious transaction reports between March 2024 and March 2025 after a hacking incident took the portal offline. iGaming Ontario told Canadian Gaming Business that the conduct-and-manage agency is building its own automated system for filing such reports via a secure data feed, much as other high-volume entities do.
The Canadian Gaming Association has made AML modernization a core part of its advocacy, noting that it intends to “actively participate” in a parliamentary review of PCMLTFA.
